Obama: US will always be a AAA-rated country despite what rating agencies say

dandelion

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At this point I'm very fed up with being rail roaded by the fringes of the political right. The republicans are running the table. The White House has retreated or caved at every major showdown.
Trouble is, I think it is correct that both cuts and tax rises are needed. It depends i f you believe there is still any mileage in spending to boost the economy. If you do, then cuts are pointless and counter productive.

On the other hand, if you believe matters are already so grave that successful stimulus cannot be afforded, then it is time to give up on that and try something else. The only remaining alternative is printing money and encouraging inflation. This has the double benefit of paying off your debt as you print, and reducing the true value of your debt as the remaining number becomes worth less. Repatriates the debt to every holder of dollars. China is already unhappy that its massive dollar holdings are under threat of losing value. Naturally, this will undermine the worlds desire to invest in dollars, if that matters.

If you dont think you could ever pay it back, or dont fancy inflation, then its time to cut spending. Maybe the democrats are already at that point in the game. Hence little resistance. Just at this moment on the news here everyone seems to be thinking the federal reserve is about to start printing.
 

D_Percy_Prettywillie

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I would wag my finger equally at the White House if the Democrats had said "Spending cuts are out of the question." They didn't. In fact, that was 50% of their proposals. Everyone agreed that spending cuts were necessary and that even entitlements weren't sacrosanct. They realized that cuts alone wouldn't get the job done and that a cuts only approach only had the appearance of action and solvency. Without revenue enhancements the action would be largely ineffective.

Republicans were the ones who said "No tax increases of any kind!" And after weeks of debate, they finally got their way. The White House no longer seems like its fighting for what it believes in. The goal of the current Administration seems to be to spin how its perpetual political defeats by the right aren't as bad as they seem even while the Dow plummets 500 points immediately after the actions purposed by the republicans are implemented.

Republicans are responsible for holding the country hostage over this mess by playing games with the debt ceiling. Democrats are guilty of being spineless. We need Jack Bauer or Jack McCoy in the White House. Instead, we've got Jack Johnson.




JSZ
 

Jason

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Trouble is, I think it is correct that both cuts and tax rises are needed.

Yes. Far, far deeper cuts than even the Tea Party are suggesting along with far, far higher tax rises than any Democrat is setting out. US politicians just don't seem to get it. The scale of the changes needed dwarfs their comprehension. The US economy is so deeply in debt that even a calculation error of $2trillion is not material!

If the US thinks the solution can come from either piffling expenditure cuts (Republicans) or piffling tax rises (Democrats) then the nation is living under a delusion. Rather the nation must apply austerity up to the point when society begins to crack.

When is the next downgrade going to be? And the next? And the next?
 
D

deleted213967

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What spending cuts?

The sorry debt ceiling deal (at best) will only slow down the rate at which our beloved federal bureaucracy will increase spending.

Under that arrangement we will still spend more every year and maintain an obscene deficit and increase the national debt.

Only in the la-la-land of Washington can not buying that Ferrari you dreamed of buying count as a "spending cut".
 
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dandelion

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Yes, thats the problem. The test of the rating agency is that the US must at least have a plan which might work. The iceberg could still be quite a long distance away, hard to tell in this light, but SOMEONE has got to swing the wheel over.
 
D

deleted213967

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Deserved contempt for those agencies notwithstanding, I am still surprised that we didn't get our comeuppance sooner.

What next? Should Obama be re-elected, he could well preside over the regression of the US to world's second banana.

Follow The Leader: President 胡锦涛!


 

D_Larry_Lowboys

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This headline was on MSNBC. Really, does he set the ratings and the subsequent interest rates? Oh, also the Dow is down 500 points today. How deep will the rabbit hole go?


Credit ratings and interest rates aren't directly connected. It could lead to higher interest rates, but I don't think that will be very likely. It isn't as if large investors will stop buying U.S. bonds because of the downgrade. A lot of people will disagree with this , but investing in the U.S. economy through bonds is currently and will always be (at least in the 50+ years I will still be around), the safest investment one can make.
 
D

deleted213967

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Credit ratings and interest rates aren't directly connected. It could lead to higher interest rates, but I don't think that will be very likely. It isn't as if large investors will stop buying U.S. bonds because of the downgrade. A lot of people will disagree with this , but investing in the U.S. economy through bonds is currently and will always be (at least in the 50+ years I will still be around), the safest investment one can make.

Precious metals beg to differ...:biggrin1:
 

Thedrewbert

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I would wag my finger equally at the White House if the Democrats had said "Spending cuts are out of the question." They didn't. In fact, that was 50% of their proposals. Everyone agreed that spending cuts were necessary and that even entitlements weren't sacrosanct. They realized that cuts alone wouldn't get the job done and that a cuts only approach only had the appearance of action and solvency. Without revenue enhancements the action would be largely ineffective.

Republicans were the ones who said "No tax increases of any kind!" And after weeks of debate, they finally got their way. The White House no longer seems like its fighting for what it believes in. The goal of the current Administration seems to be to spin how its perpetual political defeats by the right aren't as bad as they seem even while the Dow plummets 500 points immediately after the actions purposed by the republicans are implemented.

Republicans are responsible for holding the country hostage over this mess by playing games with the debt ceiling. Democrats are guilty of being spineless. We need Jack Bauer or Jack McCoy in the White House. Instead, we've got Jack Johnson.




JSZ


The issue isn't that Obama wussed out. The issue is that the Teaparty is willing to be reckless with the world economy. Obama wasn't ready to nuke the economy. The TeaParty patriots are salivating at the idea.
 

Thedrewbert

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One of the problems with these spending cuts is that it will almost certainly push the U.S. back into recession. Morgan Stanley is predicting a 1.5% drop in GDP. Seeing as we're already only doing 0.2% GDP, that means if Morgan Stanley is right, another recession is all but certain.

The joke then becomes this: The recession could lower tax receipts even more and actually end up increasing the size of the deficit.
 

D_Percy_Prettywillie

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He showed up to the table, willing to negotiate on spending cuts. The democratic party showed up ready to make decisions that would be unpopular with their base but that they knew were necessary. That's all well and good. I don't think there's an American out there who doesn't agree that are ways to save money by reducing government spending both by reallocation, tighter restrictions, and yes, by making adjustments to entitlements. Everyone agreed on that fact.

He "wussed out" on revenue enhancements. Their case was so soporific it was barely understandable to the electorate (and by that I mean the people who have only a passing understanding of what is going and even less of an interest in actually doing any research) and in the end, they caved.

Two parties show up to the table and only one of them is walking away with what they want at the end of the day. From the Bush Era tax cuts to the budget to the debt ceiling to Health Care, the White House hasn't had a true political victory in the form of advancing their platform in quite some time and that is what I take issue with.






JSZ
 
D

deleted213967

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The issue isn't that Obama wussed out. The issue is that the Teaparty is willing to be reckless with the world economy. Obama wasn't ready to nuke the economy. The TeaParty patriots are salivating at the idea.

Right. Sarah Palin did it. We know she masterminded the downgrade and the 100% of GDP national debt (not to mention the unfunded liabilities north of USD 200 trillion).

She should be bare-bottomed by Rachel Maddow before a live audience.

Tickets are selling fast. Call now!
 

D_Percy_Prettywillie

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Right. Sarah Palin did it. We know she masterminded the downgrade and the 100% of GDP national debt (not to mention the unfunded liabilities north of USD 200 trillion).

She should be bare-bottomed by Rachel Maddow in front of a live audience.

Tickets are selling fast. Call now!


Despite the facetious nature of your post, you aren't far off the mark, and this is remarkably easy to track;

The Tea Party has said, time and again, they are 100% against tax increases of any sort and it is an issue on which they will not budge. That is one of the key and primary reasons Standard and Poors downgraded the US to AA+. They cited inflexibility in Congress as their rationale, stating that if Washington was being run by people so shortsighted as to think simply cutting spending would fix the problem, without any additional revenue, the likeliness of repaying our debts on time would be significantly diminished.

The White House argued (and lost) for revenue enhancements. The Tea Party stood against that idea. S&P downgraded us almost immediately after the "deal" was reached and look what happened.

Sarah Palin isn't an elected official but the people she represents and who holds her beliefs and values that are are directly responsible for the perpetuation of this debacle.






JSZ
 

Thedrewbert

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He showed up to the table, willing to negotiate on spending cuts. The democratic party showed up ready to make decisions that would be unpopular with their base but that they knew were necessary. That's all well and good. I don't think there's an American out there who doesn't agree that are ways to save money by reducing government spending both by reallocation, tighter restrictions, and yes, by making adjustments to entitlements. Everyone agreed on that fact.

He "wussed out" on revenue enhancements. Their case was so soporific it was barely understandable to the electorate (and by that I mean the people who have only a passing understanding of what is going and even less of an interest in actually doing any research) and in the end, they caved.

Two parties show up to the table and only one of them is walking away with what they want at the end of the day. From the Bush Era tax cuts to the budget to the debt ceiling to Health Care, the White House hasn't had a true political victory in the form of advancing their platform in quite some time and that is what I take issue with.






JSZ

Something to remember. There was nothing done about the expiring of the Bush tax cuts at the end of the year. All Obama has to do is... nothing... and they expire. This is a backdoor way of getting the revenue increases he wanted without making them part of the bigger deal.
 

Thedrewbert

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Right. Sarah Palin did it. We know she masterminded the downgrade and the 100% of GDP national debt (not to mention the unfunded liabilities north of USD 200 trillion).

She should be bare-bottomed by Rachel Maddow before a live audience.

Tickets are selling fast. Call now!

We were getting downgraded regardless of what happened. That much was clear by the end of July.

I didn't blame it on Sarah Palin at all. I blame it on the 60 teaparty caucus members who can't do math.
 
D

deleted213967

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Despite the facetious nature of your post, you aren't far off the mark, and this is remarkably easy to track;

The Tea Party has said, time and again, they are 100% against tax increases of any sort and it is an issue on which they will not budge. That is one of the key and primary reasons Standard and Poors downgraded the US to AA+. They cited inflexibility in Congress as their rationale, stating that if Washington was being run by people so shortsighted as to think simply cutting spending would fix the problem, without any additional revenue, the likeliness of repaying our debts on time would be significantly diminished.

The White House argued (and lost) for revenue enhancements. The Tea Party stood against that idea. S&P downgraded us almost immediately after the "deal" was reached and look what happened.

Sarah Palin isn't an elected official but the people she represents and who holds her beliefs and values that are are directly responsible for the perpetuation of this debacle.

JSZ

What kind of fantasy tax system would address a USD 200+ trillion (who is counting at those levels) shortfall?

Last time I checked, there were only about 500 Fortune 500 CEOs, and one can only confiscate all their wealth once.

Here is what S&P really said (unaltered):

“The [debt-ceiling] plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability. Our opinion is that elected officials remain wary of tackling the structural issues required to effectively address the rising U.S. public debt burden in a manner consistent with a ‘AAA’ rating and with ‘AAA’ rated sovereign peers.”


 

D_Percy_Prettywillie

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Something to remember. There was nothing done about the expiring of the Bush tax cuts at the end of the year. All Obama has to do is... nothing... and they expire. This is a backdoor way of getting the revenue increases he wanted without making them part of the bigger deal.


True enough... but that isn't governing. That's duck and cover. I'm tired of hiding from these people. I'm tired of being held hostage by their blatantly insane idea of what constitutes reasonable government. At what point does the intelligentsia take the gloves off and say "Enough is enough. Inbred hicks, racists, and people stuck in 1981 are no longer going to be in charge of this country. Intelligence isn't a handicap, moving forward is preferable to standing still or trying to recapture what was, and its time for those who think otherwise to sit down and shut up."





JSZ
 

D_Percy_Prettywillie

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What kind of fantasy tax system would address a USD 200+ trillion (who is counting at those levels) shortfall?

Last time I checked, there were only about 500 Fortune 500 CEOs, and one can only confiscate all their wealth once.

Here is what S&P really said (unaltered):

“The [debt-ceiling] plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability. Our opinion is that elected officials remain wary of tackling the structural issues required to effectively address the rising U.S. public debt burden in a manner consistent with a ‘AAA’ rating and with ‘AAA’ rated sovereign peers.”


This is taken directly from their website;

"We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process,"

They don't think we cut enough (and frankly I don't either. In fact a lot of people don't. After that Diane Sawyer bit that showed just little a difference the cuts we made would make over the next ten years) but they also realize we'll never reach a deal on revenue enhancements. And why do you think that is? Who is that is holding fast and being unwavering in their rhetoric about what is and what is not on the table?

Only one side of this "debate" (is there a word for a battle everyone knows will end in surrender? A French word maybe?) has taken that stance and to not acknowledge that is to look at this whole mess with your right eye closed.





JSZ